‘Will “Portfolio Primacy” Throw a Monkey Wrench in Elon Musk’s Plans to Acquire Twitter?’

“Assuming Elon Musk doesn’t withdraw his current offer to buy Twitter, is the Musk takeover really a done deal? In a recent interview with Brook Fox of ProMarket, Oliver Hart, the Nobel prize-winning economist, claimed that the fiduciary duties of investment advisers to index funds, such as BlackRock, Vanguard, and State Street (the Big Three), would compel them to vote for Elon Musk’s offer to buy Twitter given his willingness to pay a significant premium over market price. Professor Hart made his claim based on his understanding that their fiduciary duties require them ‘to act in a way that maximizes financial return’. Even though I share Professor Hart’s understanding of the fiduciary duties of investment advisers, I respectfully disagree …” (more)

[Bernard S Sharfman, Oxford Business Law Blog, 16 May]

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